The British government on Thursday distanced itself from harsh criticism of Israel by US Secretary of State John Kerry, saying peace between Israel and the Palestinians cannot be brokered solely on Israeli settlement construction.

British Prime Minister Theresa May's spokesperson said Britain supports a two-state solution and considers the construction of settlements on Palestinian lands illegal.

However the statement added that the issue of settlements was only part of the problem.

"But we are also clear that the settlements are far from the only problem in this conflict," the spokesperson said.

"In particular, the people of Israel deserve to live free from the threat of terrorism, with which they have had to cope for too long,"

Without referring to the secretary of state's comments, the British government's comments appeared to criticise Kerry's speech, even though the UK voted in favour of the Security Council resolution last week that deemed Israel settlements beyond the 1967 border illegal.

“We do not, therefore, believe that the way to negotiate peace is by focusing on only one issue, in this case the construction of settlements, when clearly the conflict between the Israelis and Palestinians is so deeply complex," May's spokesperson said.

"And we do not believe that it is appropriate to attack the composition of the democratically elected government of an ally. The government believes that negotiations will only succeed when they are conducted between the two parties, supported by the international community."

The comments from Downing Street come a day after Kerry issued a warning to Israel in which he said building settlements threatens the country's future as a democracy.